| Increased consumer spending will usually cause | higher employment levels |
| Brad Johnson has a goal of “saving $50 a month for vacation.” Brad’s goal lacks: | time frame |
| A question associated with the saving component of financial planning is: | Do you have an adequate emergency fund? |
| Time value of money refers to changes in consumer spending when inflation occurs | False |
| If you desire your money to double in 6 years, what rate of return would you need to earn? | 12 percent |
| Increased home building results in: | increased job opportunities, higher wages, increased consumer spending, overall economic expansion. |
| A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends a direction for your financial activities is a(n): | financial plan |
| The risk premium you receive as a saver is based in part on: | the uncertainty associated with getting your money back and the expected rate of inflation |
| Financial planning information sources generally do not include | Personal friends |
| Trade balance is defined as the difference between a countries exports and imports | True |
| More recently, the annual price increase for most goods and services as measured by the consumer price index has been less than_________ percent. | 2 |
| Who is the most likely to benefit from inflation? | borrowers |
| Financial institutions include the following | Banks, Credit unions, insurance companies, investment companies |
| A major activity in the planning component of financial planning is | Allocating current resources for spending |
| The ability to readily convert financial resources into cash without a loss in value | liquidity |
| The main responsibility of the Fed is to | maintain an adequate supply of money |
| Developing and using a budget is part of which component of financial planning? | Planning |
| The future value of 1,000 deposited each year for 5 years earning 4 percent would be approximately | 5400 |
| A family spends 40,000 on living expenses. With an inflation rate of 3 percent, they can expect to spend approximately ____________ in three years. | 43,720 |
| Interest on savings is calculated by multiplying the principle amount times the opportunity cost times the annual interest rate | False |
| Higher consumer prices are likely to be accompanied by | Higher interest rates |
| The stages in the family and financial needs of an adult are called the | Adult life cycle |
| Opportunity costs refer to what a person gives up when making a decision | True |
| A decrease in demand for a product or service may result in unemployed from staff reduction | True |
| With an inflation rate of 9 percent, prices would double in how many years? | 8 years |
| The main goal of personal financial planning is managing your money to | Achieve personal economic satisfaction |
| Determining your current financial situation is a part of which step in the financial planning process? | First |
| Inflation risk may include changes in buying power and | Rising prices, falling prices, decisions to buy later, and decisions to buy now |
| The uncertainty associated with evaluating your alternatives is referred to as | Risk |
| Higher interest rates can be caused by | Lower money supply |
| Which of the following goals would be the easiest to implement and measure its accomplishment? | Save 100 dollars a month to create a 4,000 dollar emergency fund |
| The Fed refers to | The federal reserve system |
| Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to: | liquidity risk |
| Present value is also referred to as compounding | False |
| Higher prices are likely to result from | Lower demands by consumers |
| Inflation reduces the buying power of a dollar | True |
| developing financial goals is the second step in the financial planning process | True |
| A financial plan is another name for a budget | False |
| Economics is the study of using money to achieve financial goals | False |
| Which of the following would increase the risk of a loan to the lender? | Inflation greater than the loan rate |
| Planning to buy a car is an example of an intangible goal | False |
| Lenders benefit more than borrowers in times of high inflation. | False |
| Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes. This would be an example of: | balance sheet |
| Which of the following is an opportunity to contact several firms in a short time span? | A career fair |
| Financial payments that do not very from month to month are referred to as variable expenses | False |
| Lynn Roy’s goal has been to travel around the world. She has now been traveling for six months and she has decided she is a little tired of living out of a suitcase. She has decided to go home, look for a part time job and take shorter trips to locations around the world that appeal to her. Which step in the financial planning process does this scenario most likely demonstrate? | Reviewing and revising her financial plan |
| In addition to inflation and consumer demand, what is another economic factor that can affect career opportunities? | Demographic trends |
| The finalist for a job position are invited for an selection interview | True |
| The main economic influence that causes inflation is | Increased in demand without increasing supply |
| Discretionary income is | Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter |
| An example of a liquid asset is a | savings account |
| Warranties are commonly associated with ____________ purchases. | consumer |
| Elizabeth Gleason just died. At the time of her death the total value of her assets was $150,000. The federal government collected $7,500 in taxes based on this value. What type of tax is this most likely to be? | estate tax |
| Which of the following is typically considered to be a personal financial record? | Birth certificate, marriage license, certificate of deposit, and social security card |
| Which of the following is a professional association that can assist in career planning for a specific area? | American Marketing association |
| Bill Evans is concerned about the effect of current economic conditions on various career fields. Which one of the following would be most useful to Bill as he addresses his concerns? | Newspaper and Television |
| Intangible goals are goals relating to personal relationships, health, and education | True |
| Cash Flow Statement | Reports a person or families cash receipts and payments |
| Money received in the form of dividends or interest is classified as | Investment income |
| Blake Edwards has done some research and has discovered that economists believe interest rates will rise significantly over the next two years. Blake believes that this will lead to fewer homes being sold and fewer jobs in the banking and mortgage industries. This is an example of __________________ influencing jobs in the future. | economic conditions |
| Which of the following would increase the risk of a loan to the lender | Inflation rate greater than the loan rate |
